What is Bitcoin? The Origin of Bitcoin History

What is Bitcoin?

What is Bitcoin Anatomy

How did Bitcoin Start

In 2009 A technical paper was posted on the internet by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System. It described a system of cryptocurrency that was not backed by any government or any form of existing currency. Interestingly, there is no such person. It’s a pseudonymn.

How did Bitcoin exist

Bitcoin is based on solving an encryption formula which requires extreme amounts of computing power. Each time you solve a portion of the formula you earn a “BitCoin.” Websites like Deepbit.net help you set up the mining formula. Companies began to sell hardware called gate array miners to enhance the processing speed. There are Only 21 million BitCoins will ever exist. Nearly all Bitcoins have been mined and are now in circulation. Great article on tomshardware.com titled “Confessions of an Accidental Bitcoin Miner.”

How Does Bitcoin Work

Vision of Bitcoin

Bitcoins are intended to be digital currency. Buyers and sellers will use them and eliminate all the middlemen such as credit cards, ATM machines, etc. Bitcoins will be safer than carrying a plastic card. Bitcoins will be an international currency with no exchange transaction fees.

Who Sell Bitcoin?

Larger Buyers go to Exchanges An Exchange is a website with significant software and funding. Exchanges act as a clearing house to match buyers and sellers similar to Stock Exchanges. They keep a very small transaction fee for each trade. There are at least 21 Bitcoin Exchanges in the U.S. alone Mt Gox was one of the largest exchanges and was located in Japan.

Using An Exchange

To Buy Bitcoins on an Exchange: Create an account at an exchange like Coinbase.com Wire them some money (no credit cards allowed) Funds will show up in your account Purchase or sell Bitcoins whenever you wish from your account. You can have all or some sent to your Bitcoin wallet on your computer.

Buy Bitcoin in Your Local

Many small Dealers want to make money selling Bitcoin to individuals who use them for e-commerce. The Dealer will withdraw Bitcoins from their account at an Exchange and sell them to you. You can buy any fraction of a coin you wish.

Buy Bitcoin Using ATM

ATM’s that sell Bitcoin are in a very few locations.

First one was in Texas in a gun store.

Bitcoin ATM’s only take cash.

They only sell Bitcoin, you can’t convert Bitcoin to cash.

Who Accepted Bitcoin?

Thousands of online merchants such as:

Pirate Bay – Online sharing site for questionable materials.

OKCupid – Online dating site

Overstock.com – Sells clearance merchandise

TigerDirect.com – Major electronics retailer

Lolliphile.com – Wine lollipops with pictures of scantily clad women

50,000+ Retail stores (and counting) accept Bitcoin

Hotels in Las Vegas

Gift Cards for GAP, Lowes, Burger King, etc.

Mostly small merchants who want to increase traffic

Will Bitcoin Survive?

JP Morgan Chase filed a patent to address the issues of a cryptocurrency like Bitcoin. Since most owners are speculators the true price for owning Bitcoin only to use as a currency is unknown. Hedge Funds and Banks will likely start trading Bitcoins similar to international currencies and gold. Bank of America announced that Bitcoin could be a major means of payment for commerce.

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2 comments
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"Good point on the taxes.I do plan to declare my Etherium gains once I sell it. Actually, this is one of the reasons why I am still holding all of it. My income is already big and I do not want to give away 30% of the gains…"

I do plan to declare my Etherium gains once I sell it. Actually, this is one of the reasons why I am still holding all of it. My income is already big and I do not want to give away 30% of the gains…"Bitcoin Cash ABC Core